Growth pitstop book sample sections

Ray Collis & John O' Gorman
Plus 2,750 managers across 12 industries
‘Business is a lot like racing. It’s about:
competition, speed & winning. There
is only one thing missing - great Pitstops!
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www.growthpitstop.com
ISBN: 978-1-907725-04-3
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© Growth Pitstop
Dublin – Oslo - London
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ADVANCE PRAISE
‘Most organizations have few alternatives to profitable growth; it’s a
pre-requisite for maintaining valuations, expanding opportunities and
attracting relevant talent, and other core business issues.
In Growth Pitstop, Ray Collis and John Gorman dissect the cross-
functional requirements for growth, and their engaging Formula-
1 model is more than a metaphor: chapter by chapter, their
book provides an actionable agenda that managers can use for
accelerating growth in their firms.’
Prof. Frank Cespedes
Harvard Business School
Author of ‘Aligning Strategy and Sales’ (HBR Press, 2014)
‘Growth Pitstop provides a business model that can prepare companies
for the ever increasing speed of business. I’ve spent my whole life in a
fast paced business, where success comes to teams who ask their
people to sometimes stretch beyond their best. Growth Pitstop
captures the essence of how to do this.
Many people admire the great skills of the world’s most successful
motorsports teams, and wish that their corporate team could operate
at that level. Now they can learn how to do it’.
Derek Daly
F1™ Racer (64 Grand Prix races)
Author of ’Race to Win’ & ‘How to Become
a Complete Champion Driver’
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CONTENTS
1: Introduction & Executive Summary 1
Part 1: The SPEED FACTOR
2: The Need for Speed 21
Most managers want their organizations to go faster, yet most never
reach top speed.
3: Metaphor for Growth 47
Want fresh thinking & creativity around growth? First, change the
language and imagery used.
4: Formula for Growth™ 67
Growth is complex, sustaining it is even more complex still. Like math
or science it requires a formula.
Part 2: SPEED TESTS
5: SPEED TEST 1: The Growth Machine 101
A driver can only go as fast as the machine - racing machine or
revenue generating / value creating machine - he/she is driving
6: SPEED TEST 2: The Pitstop 123
For the Revenue Generating / Value Creating Machine to perform at
its best requires regular mid-race pitstops.
7: SPEED TEST 3: The Pit Team 149
The ability of senior cross-functional managers to work like a pit
team is perhaps the ultimate competitive advantage.
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8: SPEED TEST 4: The Pit Lane 181
Creating a winning environment – one that facilitates effective cross-
functional collaboration, learning & innovation.
9: Conclusion & Agenda for Action 215
APPENDICES:
Run Your Own Pitstop 230
Predictive Growth Analytics 231
Growth Psychology 232
About the Authors 234
Other Books in the Series 236
Bibliography 239
Space for Notes & Doodling 262
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INSPIRATION
Imagine racing legend Michael Schumacher sitting with strategy guru
Michael Porter at one table and Harvard professor Frank Cespedes with
F1™ luminary Frank Williams at another. Elsewhere in the room author
and ex-P&G CEO Alan Lafley is sitting with racing legend Alain Prost and
stellar strategy consultant Chris Zook is talking to the Red Bull team’s
Christian Horner.
Also in the room are Garry Hammel, Patrick Leincioni and Henry
Mintzberg. This book imagines the fascinating conversations that
would result on topics such as; performance, innovation, teamwork,
leadership and talent. Most important of all; the drive to win!
This book reveals how leading figures in the world’s fastest sport share
the same interests as the CEOs of the world’s fastest growing
companies and the big names of the world’s most prestigious business
schools. It brings the principles of winning in the world’s most
demanding sport to competing in the world’s fastest changing markets
drawing inspiration from:
• The passion, discipline and skill of motor racing champions
such as; Michael Schumacher, Niki Lauda, Ayrton Senna and
Lewis Hamilton to name just a few.
• The drive for excellence and innovation of leaders in the sport
such as; Bernie Eccleston, Ron Dennis, Colin Chapman, Frank
Williams, Mark Gallagher, Derek Daly and Eddie Jordan.
Thanks for the Inspiration
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‘You never really know how quick you are before you reach F1™.’
Jean Alesi, Driver
1
F1™, FORMULA ONE™ and FORMULA 1™ are trademarks of Formula
One™ Licensing BV, a Formula One™ group company. They are used in
good faith in accordance with ‘Nominative Fair Use’ to describe the
qualities and characteristics of these highly unique and special events
/ sports / pursuits.
The Growth Pitstop™ is not affiliated with or has not been endorsed or
sponsored by Formula One™ in any manner, nor licensed any
intellectual property for use in this book.
The Growth Pitstop™, The Sales Strategy PitStop™, Revenue Circuit™
are registered marks of The ASG Group.
Other trademarks referenced, including: Scuderia Ferrari F1™, Lotus
F1™, NASCAR™, Goolge™, Mercedes™, Red Bull™ and Nike™ are the
registered trademarks of the respective organizations.
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Dedicated to Michael Schumacher and his family.
My philosophy is never to think you have achieved it! Always looking
for the millimeters/seconds ... find it on lap 50 of the third day!
Michael Schumacher2
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GRATITUDE
TheGrowthPitstop™is a9-yearprojectwhichhas spanned47countries
and 12 industries. It has involved hundreds of workshops – or what we
call pitstops - on the topic of growth. These have been attended by
managers from organizations, such as; IBM, BT, 3M and Medtronic
to name just a few. Although there are simply too many people and
even companies to mention, we owe a depth of gratitude to you all.
A special thanks to all those quoted and referenced in this book –
their ideas and research have fueled our own work. And finally thank
you to those in the pit lanes at tracks from Monte Carlo to Abu Dhabi
- your focus, discipline and teamwork inspires a new standard for
performance.
From Ray in Oslo:
To my family, Jeanette, Kevin and Andreas, this book is for you with
love. To my mother Theresa and departed father Desmond, as well
as my brothers Damien and Gavin, special thanks for your
encouragement and support. To my Norwegian family and friends,
‘tusen takk’ for your support.
From John in Dublin:
To my wife Janel and daughter Symone, you both keep me grounded
and ensure I stay honest with myself. You are my greatest supporters,
despite the sacrifices you both make as I travel around the world. To
my parents and my sister Mary, I owe my belief in people, learning
and being curious about human behavior to you. Your unending
support and words of encouragement continue to inspire my work
and research.
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SECTION 1
INTRODUCTION
& EXECUTIVE SUMMARY
A bad day at the racetrack beats a good day at the
office.
Race Saying
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2 Growth Pitstop™
THE ULTIMATE QUESTION
What percentage of your company’s full growth potential is presently
being exploited? That simple yet powerful question is a great place to
start a senior management conversation. Indeed, it is such a powerful
question that, of all the possible openings to this book, we wanted to
begin with it. So here it is again:
Q: What percentage of your company’s full growth
potential is presently being exploited? Circle the point on
the scale below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(% of full growth potential exploited)
Unless you marked 100% on the scale, this book was written for you.
Across the thousands of managers that we have benchmarked the
average response to the ‘growth potential’ question is 55%. That is a
very positive and encouraging figure – it means that most organizations
have lots of potential for growth. But it leads us to the next question:
With so much potential to accelerate growth what is stopping you?
How to accelerate growth? Sustained profitable growth that is. Is the
solution to be found in strategy, execution, leadership, innovation or
change? Does accelerating your organization or unit’s growth depend
on; new products, markets, channels or sources of competitive
advantage? Well it depends on who you ask or where you look for
inspiration!
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Introduction 3
GOING FASTER: THE NEW EXPERTS
In this book we seek advice on accelerating growth from the ‘usual
suspects’; business professors and writers (over 400 of them), as well
as senior managers (some 2750 of them). But we also asked another
group who is every bit, if not more; obsessed with speed; high speed
racers and race team managers. They also talk about; performance,
competition and talent, for example, but they come at it from a very
different perspective. The language and stories they used to describe
the requirements of winning on the racetrack turned out to be a
powerful vehicle for communicating the requirements of winning in the
marketplace.
Talking about going faster at the same time as growing faster resulted
in better conversations, deeper insights and more creative solutions. In
short the racing perspective emerged as a powerful metaphor to
reframe the cross-functional requirements of business success, as well
as a powerful means of communicating the latest research into
organizational growth, leadership, change and strategy - execution.
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4 Growth Pitstop™
YOU ARE A CHAMPION!
Going fast requires a great driver, but that is hardly a secret. That is you
- the corporate equivalent of a champion racer, such as Lewis Hamilton,
Nikki Lauda or Michael Schumacher!
Q: Are you a champion driver when it comes to the performance of
your organization, business unit or team?
Circle the point on the scale
0% 10% 20% 30% 40% 50% 60% 70% 90% 100%
(% confidence that you are a champion driver)
You have the talent, the passion and the skill of a champion racer –
don’t you? But is that enough to make your organization go/grow
faster? What else does a great driver need?
Race Champions such as Michael Schumacher - the most successful F1™
race champion ever - clearly possess great drive, passion and skill. But
listen to them talk and you will quickly learn that they attribute their
success to more than just their own personal efforts and abilities
(considerable though they may be). There are valuable insights here for
managers who want to drive their businesses forward. We call them
Speed Tests, they reveal the requirements of going faster and they are
as relevant in the boardroom as they are on the race track. Let’s
examine them now.
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Introduction 5
SPEED TEST 1: MACHINE
How fast you can go depends on what you are driving - whether it is a
car or a business. That is Speed Test number 1. As the champion driver
needs a high performance race machine, the Champion CEO requires a
powerful Revenue Generating or Value Creating Machine.
A driver can only go as far and as fast as his or her vehicle will take him
or her. For a CEO or senior manager, the organization’s business units,
divisions and teams are the vehicles of growth. Within each the
strategies, structures, systems and process that generate revenue (for
the business) and create value (for shareholders, customers and
society) are the machinery to accelerate growth. But clearly some
vehicles/machines are more powerful than others.
Q: Is your organization (and its various business units) powered by a
high-performance revenue generating / value creating machine?
Circle the point on the scale below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(% satisfaction with your revenue generating/
value creating machine) Race Machine Advantage
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6 Growth Pitstop™
If you rated your revenue generating/value creating machine at 75% or
above, then you may have an advantage – a Race Machine Advantage.
But if you rated it lower your machine is probably slowing your
organization down and Section 5: The Growth Machine is for you.
It's a never ending battle of making your cars better and also
trying to be better yourself.
Dale Earnhardt3
Yet any successful driver will tell you there is no such thing as the
perfect machine. It needs to be worked on constantly - set up for the
race, optimized during the race and worked on in between races. Going
faster requires great pitstops. That leads to Speed Test number 2 and
it is as relevant to winning in the marketplace as it is to winning on the
racetrack.
SPEED TEST 2: PITSTOP
For the race machine to perform at its best requires regular mid-race
pitstops. So too the Revenue Generating / Value Creating Machine
requires ongoing maintenance, optimization and adjustment. But there
is no time to waste, pitstops have to be fast.
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Introduction 7
The pitstop is a metaphor for performance management generally, and
an agile approach to strategy and execution in particular. Before setting
out on the track the machine needs to be set up for success (gear ratios,
choice of tires and so on). This is the equivalent of setting your strategy,
including; product-market decisions, sales and marketing activities,
resourcing and so on. But optimizing for success is not a once off pre-
race event. Rather it takes place at regular intervals throughout the
race. The pitstop is the means by which driver and machine can address
performance issues and adapt to changing track conditions, the moves
of a competitor and so on. This has to happen mid-race because it is
too late once the race is over. As a manager you are also in a race - a
race to quarter or year end with competitors in fast pursuit. But will
you take a pitstop and, if you do; will it enable you to go faster, or just
slow you down?
Q: Does your organization pitstop it’s strategies, projects and
initiatives in a way that helps it to win?
Circle the scale below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(% satisfaction with your ability to take winning pitstops)
If you rated your management team’s ability to speedily and effectively
execute, review and adjust projects, strategies and initiatives at 75% or
above you may have a Pitstop Advantage. But if you rated it lower then
this area is probably slowing your organization down and Section 6: The
Pitstop is for you.
The race track is an increasingly popular metaphor to communicate the
demands of; accelerating innovation, out-maneuvering competitors
and responding swiftly to fast changing markets. But every race track
has a pit lane and ironically it is there that managers can see
the behaviors and capabilities that are required for effective cross-
functional collaboration, business agility and innovation.
Pit Stop Advantage
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8 Growth Pitstop™
Great drivers require great machines and those machines require great
pitstops, but what determines the greatness of a pitstop? Well, that is
Speed Test number 3; the pit team. Going faster also requires a great
pit team.
SPEED TEST 3: PIT TEAM
Winning a motor race depends on the ability to quickly pull the car into
the pit lane and to perform essential improvements without falling
behind. But it has to be fast, in just 2-3 seconds a team of up to 20 will
surround the car and in an incredible display of teamwork do what is
required to optimize the car and send it on its way. The same needs to
happen when a cross-functional senior management team comes
together to plan and review key growth strategies, projects and
initiatives.
The machinery of business is only as powerful as the pit team that
maintains and supports it. Similarly, the growth performance and
potential of your organization depends on your managers working
effectively as a pit team. The highly choreographed precision of the pit
team sets the new standard for teamwork and cross-functional
collaboration. It exemplifies; urgency, discipline, trust and a passion for
winning. While each person on the pit team has their own role and
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Introduction 9
responsibilities, they are interdependent rather than independent and
all share the same goal; making the car / organization go faster.
A pit team is any team that works together effectively to maximize the
chances of winning. But when it comes to growth the ultimate pit team
is the cross-functional senior management team. Of all the teams in
the organization it is the performance of this team that matters most.
Q: How well do your senior managers work together as a Pit Team?
Circle the point on the scale below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(% satisfaction with how managers work as a pit team)
It takes a team to win a race, even if there is only one person on the
stand collecting the trophy. The ability of senior cross-functional
managers to work like a pit crew is perhaps the ultimate competitive
advantage. If you rated your cross functional team at 75% or above in
terms of its ability to work effectively together, then you probably have
an advantage in this area – a Pit Team Advantage. But if the score was
lower this area is probably slowing your organization down and Section
7: The Pit Team is for you.
A quick recap: A great driver requires a great machine, which in turn
requires great pitstops and an effective pit team. However, the
environment in which these come together is another important
determinant of success. That is Speed Test 4: the pit lane.
Never think that success is down to your own performance
alone. If you start listening only to yourself you take the first
step back towards the bottom. The flowers of victory belong in
many vases.
Michael Schumacher4
Pit Team Advantage
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10 Growth Pitstop™
SPEED TEST 4: PIT LANE
The pit lane is where it all comes together - the driver, car, pitstop and
pit team. The corporate pit lane is the environment in which teams
work, and most importantly; win together. It is not just the physical
space, but also the social, cultural and psychological context.
The race pit lane is a high pressure environment with lots of noise, heat
and of course; fast moving vehicles. The same can apply in organizations
where personalities, politics and competing priorities distract from an
open and honest dialog regarding performance and potential. All this
results in the risk of a wheel coming off the car as it accelerates out of
the pit lane – evident in the form of problems around implementation
or execution in respect of business projects or strategies.
Q: Does your organization’s environment facilitate effective cross
functional collaboration, innovation and change?
Circle the scale below.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(% satisfaction with your organization’s winning environment)
Pit Lane Advantage
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Introduction 11
A winning environment – one that facilitates effective cross-functional
collaboration, learning and innovation - is Speed Test number four. The
culture of the organization often sets it maximum speed. If you rated
this low, then Section 8: The Pit Lane is for you. Be warned however it
is the so called ‘soft stuff’ that so often proves the hardest to manage.
Is this the ultimate source of competitive advantage?
Like the discovery of a new species in the animal kingdom, business
writers and university academics are pointing to the existence of a new
source of competitive advantage in business and industry. There are
even claims that this newly discovered advantage represents the origin
of the species - the ultimate source of competitive advantage or the
foundation upon which all other advantages - from R&D to marketing -
are built. Yet despite its emergence as one of the hot topics in
management today, it won't come as any great surprise to most
experienced managers. They know or at least suspected that it has a
key role to play in corporate success and moreover they also know that
it is a scarce commodity in many organizations. The new source of
competitive advantage is cross-functional collaboration among senior
management in respect of the key growth priorities of the
organization. In particular research suggests that the ability of a
management team to come together regularly to openly and effectively
dialog the priorities and performance of the organization is a real
indicator of the growth potential of an organization. Some call it the
ability to have ‘a strategic conversation’, we call it the ability to pitstop.
For at least twenty years, people have been studying and
writing about the increasing speed of business and the need for
organizations to be quicker and much more agile
John P. Kotter5
.
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A SHARED DEFINITION OF WINNING
As the four Speed Tests reveal winning on the race track and winning in
the marketplace have a lot in common. They represent the common
points of agreement as to the requirements of winning seen from two
different but entirely complementary perspectives; the business
professor and the champion race driver.
The lesson for managers is: working on the race car (your revenue
generating / value creating machine and the strategies, systems and
structures that accelerate it) will only get you so far. About 60% of the
way according to managers who have participated in Growth Pitstop™
workshops. To reach top speeds managers must work on the pit team
too (especially the cross functional senior management team) – that
accounts for about 40% of acceleration say managers. This is consistent
with the very latest business thinking and industry research which
points to the primary importance of organizational health in driving
performance.
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Introduction 13
Of course it is not a question of whether managers should work on the
race machine or the pit team. They need to work on both and to do so
in tandem. The means of doing this is the pitstop – that is the ultimate
Speed Test. It is the secret of F1™ levels of performance in business.
Is the performance of your organization or business unit under pressure
from more demanding customers, increased competition, new
technology or new regulations? Then take a pitstop! The secret to
winning in business as on the racetrack - it is effective pitstops.
Schumacher drew upon his multiple on - and off-track skills to
build the type of environment he needed to win. He never
criticized Ferrari, even when the car did not match his obvious
skills. He always helped and supported the team and always
wore a smile even if he was not on the podium. His classy
behavior built an almost unshakable foundation of critical trust
and belief within the team.
Derek Daly6
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BE THE F1™ OF YOUR INDUSTRY
Most companies are capable of a few fast laps, but reaching F1™ levels
of performance requires accelerating sustained and profitable growth
lap after lap and race after race. That is a real challenge even at a
modest rate of 5.5% in terms of the top line, bottom line and Return on
Assets (ROA)7
. As the qualification criterion for F1™ status in your
industry it means that only a minority of companies can qualify.
F1™ is an elite club of the super-fast, super agile and super innovative
in racing. But who are the high performers – the F1™ - in your industry
and are you among them?
Q: Do you want to be among your industry’s highest performers –
leading the way in terms of passion, innovation and of course in terms
of sustained and profitable growth? That is to be in the F1™ of your
industry?
Reaching F1™ levels of organizational speed and agility requires more
and better pitstops. With each pitstop the car and the team gets better.
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Introduction 15
A Metaphor for Growth
Fast cars, millionaire lifestyles and flowing champaign are all part of
F1™. But although these things are inherently appealing they are a
relatively superficial view of a sport and business that can inspire in so
many ways. F1™ is a high performance culture that is characterized by
a passion for winning, as well as levels of speed, agility and passion
rarely found elsewhere. It is also a model in terms of skills, teamwork
and innovation, as well as its obsession with performance and relentless
quest for improvement. These characteristics are key to winning in the
boardroom, just as they are on the racetrack. In particular, they
represent the basis for competitive advantage in a business
environment that is increasingly fast-paced, complex and competitive.
IT IS COMPLEX!
This book adopts an innovative approach, including the use of
metaphor, models and cognitive re-framing, to make it easier to access
and engage with a topic that is complex and wide ranging. It is a proven
approach to engage emerging leaders from Generations X, Y and Z.
What it cannot do however is make the challenges of growth any easier.
The contents of this book are utterly challenging, as well as
tremendously rewarding. But there is no silver bullet here. The pitstop
approach requires engaging with the full complexity of growth and
adopting a systems perspective that looks beyond people and events to
the underlying causes of business success. It also requires combining
the hard (strategies, systems and process) with the soft (culture, people
and commitment) as well as clever strategy with excellent execution.
The focus is not just on short term revenue growth but sustained
profitable growth into the longer term and that requires growth in
people, innovation, value creation and so on. It is about a situation
where all stakeholders can win - shareholders, customers and staff.
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Life is all about challenges - and, most important of all, it’s
about challenging yourself.
Jenson Button8
The solution to the challenges of growth won’t be found in any one
business discipline (e.g. leadership, change, or strategy). Nor will it be
found in any one function (e.g. marketing and sales, or finance). A
multi-disciplinary and multi-functional approach is required, across
multiple time horizons; short term, medium term and long term. The
complexity of the material in this book is a reflection of the challenge
of growth, in particular sustaining profitable growth in the long term.
The meta-model at the core of this book is built upon a complex
algorithm and 248 mathematical variables that are highly predictive of
growth performance and potential. The benchmarking data presented
in the various chapters is based on a sample of 2750 managers and over
320,000 pieces of performance data gathered across 12 industries:
• IT software, hardware and
cloud computing
• Banking and Financial Services
• Telecommunications
• Professional Services
• Medical Devices
• Chemicals & Pharmaceuticals
• Retail
• Food & Catering
• Distribution & Transport
• Education & Training
• Non-Profit
• Government & Public Sector
The research behind the Growth Pitstop™ also includes over 600
academic and other references cited in this series of books, in particular
the output of the leading consulting houses (McKinsey, Accenture, BCG,
Deloitte and PWC) and leading academic institutions (Harvard,
Stanford, Columbia and so on). It also integrates the latest in the areas
of predictive growth analytics and growth psychology (see Appendix).
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Introduction 17
DATA-DRIVEN GROWTH
F1™ has been a pioneer in the areas of Big Data, as well as ‘the internet
of things’. Masses of data are generated from every part of the car
while it is running. This data is analyzed at arrays of monitors to
determine how the car can go faster. This is vital information for the
pit team and is used to guide decisions about the timing of the pitstop,
the selection of tires, as well as any other adjustments to be
made. Relying on gut instinct won’t do.
This book is based on extensive benchmarking data on every aspect of
growth performance. The challenge for managers is to ensure that they
have the same level of real time information and analysis to guide their
decisions. That is the type of analysis that will enable them to identify
opportunities to accelerate growth. To maximize the effectiveness of
their pitstops managers can complete the Growth Pitstop™’s PGA
(predictive growth analytics) online assessment measuring 248
performance related variables. This can create an index score for any
organization (see Predictive Growth Analytics in the Appendix).
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WHAT ELSE IS THERE?
The research behind the Growth Pitstop™ is too extensive to fit into just
one book. Rather it is presented in a series of 4 books.
There is more detail on each of the books in the pitstop series in the
Appendix. In addition to the series of books the Growth Pitstop™
encompasses a range of workshop tools which organizations can use to
run their own pitstops, as well as online growth assessment/analytics –
more details in Appendix. But let’s get started exploring the
requirements of speed.
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Part 1:
THE SPEED FACTOR
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Section 2
THE NEED FOR SPEED
‘In the end overtaking is only possible when a faster
driver is behind a slower driver. If it is the opposite, then
overtaking is not possible’.
Herman Tilke9
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INTRODUCTION
In F1™ winning is about how fast you can go. In business it's about how
fast you can grow. Yet research suggests that most organizations never
reach their top speed. In this section we will examine why accelerating
sustained and profitable growth is the number 1 challenge facing
today's CEOs. It is a challenge that many will fail.
Here we will explore the need for speed and begin our quest to reveal
the secrets of those high-performing organizations that can accelerate
lap after lap to deliver growth that is both sustained and profitable.
That is those organizations who demonstrate F1™- like levels of speed,
agility and innovation.
GOING FASTER = GROWING FASTER
How do you measure the success of a leader, a management team, a
strategy, or for that matter an organization? Well, growth of
course. That is sustained and profitable growth, or growth at the top
line, as well as the bottom line.
While it may be less glamourous than multi-billion dollar mergers and
acquisitions, sustained and profitable growth tends to be largely organic
in nature. That is good old fashioned growth - deriving from the ability
to acquire, retain and grow customers.
While the mergers and acquisition (M&A) route to growth has,
at times, been favored by some organizations... growth driven
by new market expansion and high-impact innovation has
consistently achieved more sustainable success, and is thus
becoming a core capability for many companies.
Tim Jones, Dave McCormick & Caroline Dewing10
Obviously accelerating growth means growing revenue, as well as
profits. But focusing on revenue growth alone is not enough. It also
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Need for Speed 23
requires growth in terms of; customer loyalty, brand reputation,
product and marketing innovation, as well as the commitment and skill
of the organization’s people.
Sales by itself is a trailing and often misleading indicator of
enterprise performance and value.
Frank V. Cespedes11
Sustained profitable growth typically requires accelerating performance
right across the organisation. That includes; speed of response, speed
to market, speed to innovate, speed of decision making and most
important of all speed of execution. It also means accelerating; change
and innovation, skills and capabilities, strategy and execution, plus a lot
more besides.
While defining growth is relatively straight-forward, achieving it is not.
That leaves many managers with an unmet need for speed.
Grow or die! Every businessperson must understand this stark
reality. In today’s intensely competitive, technology-driven
global marketplace, no enterprise—including yours—can be
sustained without growth.
Robert Bloom & Dave Conti12
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MORE SPEED PLEASE!
Do you feel the need for speed in your organization? If you are like
most managers the answer is ‘YES’. That means you want your
organization to go (and indeed grow) faster.
Q: How satisfied are you that your organization is
moving ahead at the right speed?
0% 10% 20% 30% 40% 50% 60% 70% 90% 100%
(% satisfaction with speed of your organization)
Managers rate ‘the speed at which their organization is moving ahead’
at just 59%. That is the result across the 2,750 of managers who have
completed the online Growth Pitstop™ assessment. You could interpret
this another way: most managers see their organizations as driving at
just 59 mph in a 100 mph zone. Those are certainly far of F1™ speeds!
In the highly competitive environment of modern business, a
common mantra is “grow fast or die quickly”, and while that
may sound dramatic, it is something that every business
professional should remember and revisit.
Sean Ellis & Morgan Brown13
This is not a bad news story however. It shows that most managers see
a lot of potential for growth and that is encouraging indeed. They want
their organization to go / grow faster. Accelerating growth isn’t easy
however, especially if that growth is to be sustained and profitable over
time.
Sample

Need for Speed 25
Those who talk about slowing the pace of growth are really
saying that they have had enough, and they should get out
before they do the business (their most valuable asset) serious
damage.
Rupert Merson14
More Speed - Less Inertia?
Our research across 47 markets and 12 industries shows that most
managers think their organizations (and their CEO’s) are not going fast
enough. But such a finding goes against the traditional view of people
being slow to change.
There are countless articles and papers written about inertia and
resistance to change, yet our data points to an internal ‘need for speed’
in most organizations. In reality it should come as no surprise that
people want to belong to an organization or team that they feel is
moving ahead, innovating and making progress. Maybe therefore it is
time to challenge the stereotype of the visionary and impatient CEO
battling for progress and transformation in the face of internal lethargy
and resistance.
Why do our organizations seem less adaptable, less innovative,
less spirited, and less noble than the people who work within
them?
Garry Hammel15
EXPLORING YOUR NEED FOR SPEED
Statistics on the topic of growth make for interesting reading. But they
can be a little bit abstract or dry. So before we look at any more data on
the subject, let’s explore the issue of growth on a more personal level.
Sample

Let’s apply some creative thinking to the
growth performance and potential of your
organization by following these 3 steps:
Step 1: On the page overleaf circle the vehicle that best represents your
organization, business unit or team. Indeed, you might like to pick a
vehicle for each (if they are different).
You can think of it as a representation of your organization as a revenue
generating or value creating machine. Maybe its output is measured in
terms of; units produced, volume sold, profit made, shareholder value,
or brand image /awareness. It could also be measured in the number
of subscribers, supporters, customers or clients, and committed
employees or channel partners.
Step 2: Write down the first 3 words that come to your mind to describe
the vehicle that you have chosen:
1. ____________________________________
2. ____________________________________
3. ____________________________________
Step 3: Circle the vehicle that best represents your leading
competitor(s). Again write down the keywords (as you did in Step 2):
1. ____________________________________
2. ____________________________________
3. ____________________________________
Sample

Need for Speed 27
Circle the vehicle that best represents your organization
Sample

These 3 steps are a creative way of exploring what you see as your
organization’s need for speed. It is called a projective technique16
.
Although the approach may seem strange, it is actually a sophisticated
and powerful way of exploring attitudes, expectations and emotions
regarding growth performance and potential. It is also a test of a
manager’s ability to concisely describe the reality of their organization’s
growth performance and potential, as well as to ‘think outside the box’.
…companies will simply lack the ability to find the full potential
of growth opportunities if they only focus on quantitative
models.
Roger Martin17
WANT TO GO FASTER?
Now that you have completed the 3 steps, reflect upon the following
questions regarding the vehicle that you chose to represent your
organization, business unit or team:
• How fast is the vehicle that you have chosen? Can it deliver the
rate of growth that your organization needs?
• How well does it handle? Is it able to out-manoeuvre and
overtake the competition?
• Does it have the power and reliability required to ensure
success?
• Does it have the driver to push it to the limit, as well as the pit
team to keep it on the road?
• Will the car enable your organization to compete and win lap
after lap and year after year?
Sample

Need for Speed 29
Oh and there is one more important question:
• What is required in order to enable the car to go i.e. grow
faster?
This last question is the most important question of all. It is the question
that this book is aimed at answering. After all this book is about how to
prime your organization for accelerated growth. All these questions are
a test of a management team’s ability to get to the core of the issue of
growth performance and potential.
Fast Car or Station Wagon? What It Reveals About You
'We are not Formula One™ exclaimed one manager. We are more like a
Volvo station wagon - heck some parts of the business are like an old
clapped out Volkswagen!'
There it was - in little less than one minute that manager had revealed
more than the company’s annual report or a presentation to the board
of directors. It is a real life example of the power of a metaphor to get
at what people are really thinking. The manager's 'clapped-out
Volkswagen' remarks were a revelation not just about the company -
but the manager too. More specifically it revealed the manager's mind-
set - his confidence expectations and attitudes.
What happens next would reveal a whole lot more. In particular, how
would those who had heard the remarks respond? For example; would
they laugh, nod in agreement, refute the manager’s view or seek to
better understand it? That would reveal a lot about the mind-set of the
Sample

group, as well as the culture and health of the team. Would the
manager's remarks result in a dialog, an argument, or worse still;
silence? Either way what happens next would reveal so much about the
growth potential of the organization and its team. Unfolding in the
room was the most vital of conversations. Imagine you were there:
What would you have said, or done?
GOT A HIGH-SPEED RACER?
When it comes to the racetrack that is your industry or marketplace
there are vehicles of every class. Although many are capable of reaching
high speeds, most don’t have the speed and agility to win consistently
over the longer term. Indeed, only about one in ten have Formula One™
levels of acceleration, agility and endurance. That is according to
research by consulting giant Bain & Company18
.
Most organizations are capable of completing a number of fast laps.
But, spurts of accelerated top line growth are not enough. Sustained
profitable growth is the measure of success. That requires what we call
triple acceleration.
Sample

Need for Speed 31
For the decade of 1990–2000, only 13 percent of companies
achieved all three criteria: a relatively modest rate of growth
(5.5 percent in real terms) in (1) sales and (2) operating income,
while also (3) earning their cost of capital… and for 2001– 2010,
it was only 9 percent— fewer than one in ten companies.
Chris Zook and James Allen19
WHAT ARE YOU DRIVING?
This book with its talk of F1™ levels of acceleration and performance –
is all about the 5.5% challenge. That is the requirement of accelerating
not just the top line but the bottom line and doing it lap after lap for a
decade. Think of the triple acceleration as the F1™ qualification
criterion for industry performance – shown overleaf. It is the ultimate
test.
It is a relatively modest rate of growth - 5.5%. For example, in terms of
Return on Assets or ROI the result of such compounded rate of growth
over a 10-year period would be a 170% return on investment. Although
this is not a meteoric ROI, it is out of the reach of most organizations.
Yet, it is a challenge to sustain even such a modest 5.5% annually over a
decade.
Sample

…organizational success has never been more fragile.
Garry Hammel20
Triple acceleration is about the ability of the business to create and
capture value for all the stakeholders, including customers, staff and last
but not least shareholders. It requires blending the short term into the
longer term so as to maximize business value and returns. It is a
challenge that involves a much richer and deeper meaning of growth –
one that looks beyond the sales or the marketing function to engage all
stakeholders. It is about accelerating sustained value creation21
.
Sustained and profitable growth is rare and becoming
increasingly so.
Thomas Baumgartner, Homayoun Hatami, et al.22
The Exclusive Club of Speed
Companies capable of accelerating sustained profitable growth are the
exception, rather than the norm. They are the equivalent of F1™ racers
in their industry - capable of accelerating growth in new products and
new markets and agile enough to cope with fast changing customers,
technologies, channels, regulations and so on. But F1™ is an exclusive
club and most companies cannot stay the course when it comes to
accelerating and sustaining growth over the longer term. The norm is
short spurs of growth, especially at the top line. Long term profitable
and sustained growth is the exception, rather than the norm.
In aggregate the return on assets of US firms has fallen to one-
quarter of its 1965 levels (from 4.1% to 0.9% in 2012).
Deloitte23
Sample

Need for Speed 33
DIFFERENT CARS IN DIFFERENT RACES
In exploring the issue of growth some managers see their overall
organization as ‘the car’. However, most organisations are in effect
running a number of different cars in different races. That means
different cars for particular business units, strategies, projects or teams
– hopefully all aimed at winning. This is a long standing concept in the
area of business strategy. Indeed, many of the most popular tools in
strategy owe their origin to it. That includes the poplar BCG’s cash cows,
stars and dogs, as well as Ansoff’s Matrix of market attractiveness and
amenability24
.
Strategists have long viewed the performance of an organization as
resting on how it manages its portfolio of business units, right down to
the level of its different products aimed at different markets or
segments. The view is that ‘a one size fits all’ approach does not work
when it comes to strategy.
‘Going beyond averages to adopt a granular perspective on the
markets is essential for any company as it shifts its portfolio in
search of strong growth…’
Patrick Viguerie, Sven Smit & Mehrdad Baghai25
Sample

Markets are different, so too are the opportunities and challenges they
present. Similarly, each business unit or function has its own particular
strengths and weaknesses. Thus strategic planning has to be granular if
it is to be meaningful – it must take place at business unit level, or team.
The strategy needs to be tailored by business line, and market space and
geography. These then feed into the overall strategy at a corporate
level.
'Corporate-level strategy is the vehicle for allocating resources
among all of the business units. But it should not be simply the
sum of those parts.
Larry Bossidy, Ram Charan & Charles Burck26
We are not suggesting that every organization can or should have the
qualities of a F1™ racer. For your core business the metaphor may be a
juggernaut, or a big ship - where the emphasis is on maintaining a
steady course. But for new markets products and strategies, where
being able to pull away from the starting grid fast, execute quick
manoeuvres and complete some initial quick lap matters - F1™ is the
ideal metaphor. The challenge is therefore to maintain a steady course
at the core, while accelerating at the edges.
…dynamic capabilities are at the heart of the ability of
a business to be ambidextrous—to compete simultaneously in
both mature and emerging markets--to explore and exploit.
Charles O’Reilly & Michael Tushman27
You may not be able to accelerate your entire organization in the style
of F1™. That might not even be desirable in respect of your core
business with its long established modes of doing business and mature
processes, its long term strategies, entrenched market position, or
captive customers and channels. However, every organization has
strategies, capabilities and products or market segments that require a
more accelerated approach. In reality your organization needs to have
a number of cars in different races.
Sample

Need for Speed 35
About half (55%) of change initiatives meet their initial
objectives, but only 1 out of 4 companies sustain those gains
over the long term.
Towers Watson Inc.28
The need for speed is nothing new. It has long been a concern of
management writers and the metaphors of steering a big ship,
or teaching an elephant to dance have been widely popularized. The
only problem is that elephants and ships are not very fast, or very
agile. That is part of the reason why we have embraced the F1™
metaphor (see Section 3: Metaphor for Growth).
Organizations are like elephants-slow to change… Trainers
shackle young elephants with heavy chains to deeply embedded
stakes. As time passes, the elephant learns to stay in its place
and change does not occur.
James A. Belasco29
WHAT’S YOUR POSITION?
The first step on any strategic journey beings by defining the point of
departure. That is what the Starting Grid exercise is about. It is a high
level situational analysis that asks the question ‘where are you now?’.
Just as in racing how far and how fast you can go or grow depends on
what you are driving and where it is on the starting grid. In this way
great growth strategies begin with an honest assessment of
performance and potential.
In business most deep strategic changes are brought about by a
change in diagnosis - a change in the definition of a company's
situation.
Richard P. Rumelt30
Sample

It is simply not enough to set out where the organization wants to be
(the point of arrival) – an aspirational vision or mission statement –
unless it is grounded in clear realism regarding the point of departure,
as well as a practical step-by step plan to get there. This makes the
‘What’s Your Position?’ exercise a particularly important one.
In every Growth Pitstop™ workshop we ask
managers to put their organization or business
unit on a starting grid (shown below). Along
the top and bottom of the grid you will see that there are numbers
ranging from 0% to 100%. These numbers represent your percentage
confidence or satisfaction in terms of your organization’s or team’s
growth strategy and performance. So what is your position on the grid?
In any discussion about performance and potential it is vital to engage
multiple perspectives. This often results in surprises. In a recent
Growth Pitstop™ the CEO of a global manufacturer of specialized
building materials put the organization at 80% on the grid as did his
Sample

Need for Speed 37
head of Operations, Marketing and HR. All his national managers put
their car/organization at 30% and 50% as below. What a powerful (albeit
at times tense) conversation that resulted.
The CEO emphasised that the organization had undergone a major
transformation in the previous 16-18 months, including; internal
restructuring, the introduction of some new products and removal of
some old ones, as well as; a re-alignment of its channels.
Acknowledging that these changes entailed a lot of difficult decisions
and had been tough on everybody involved, he argued that they left the
company in ‘a much better position to race forward’. The national
managers listened, somewhat surprised at the emotion in the CEO’s
voice. They conceded that progress had indeed been made, but
emphasised that the company had to rebuild its reputation in the
marketplace. After a period of being internally focused – it had to once
again focus on its relationship with its key customer and channel
partners. It was in their words; ‘time to build again’.
Sample

Yet management, in its haste to grow, often overlooks such
critical developmental questions as, Where has our
organization been? Where is it now? and What do the answers
to these questions mean for where it is going? Instead,
management fixes its gaze outward on the environment and
toward the future, as if more precise market projections will
provide the organization with a new identity.
Larry E. Greiner31
An exercise like this is a test of a management team’s ability to openly
and honestly discuss performance, as well as potential. It is also a test
of your team’s creative problem solving abilities and the type of
approach to strategy that is increasingly being promoted by experts:
The default problem-solving model has its roots in what can be
called instrumental rationalism. …the belief that business
problems can be solved through objective and scientific analysis
and that evidence and facts should prevail over opinions and
preferences.
Christian Madsbjerg & Mikkel B. Rasmussen32
In the appendix you will find details of how you can get the starting grid
and other materials to run your own Growth Pitstop™.
How Fast Can You Grow?
In F1™ it is all about how fast the car can go – measured in lap times
and miles per hour (MPH). In business it is about how fast the
organization, business unit or team can grow – measured in revenues,
profits, competencies and / or skills. Moreover, it is about the ability of
the driver, the pit crew and the larger race team to perform to the limit.
But in the meantime consider this: Have you the right vehicle (revenue
generating/value creating machine) in the right race?
Sample

Need for Speed 39
HOW FAST IS FAST?
How fast can your company grow? Well, maybe faster than you think.
Especially when you see just how fast others can accelerate. Take those
who feature in the Deloitte Technology Fast 500™ for example, where a
turbo-charged annual growth rate of 850% is the norm. Yes it is not a
typo these companies grew sales 8.5 times each year for at least 3 years.
Now that is fast, but it is just the average. At the top of the 2015 list you
will find a New York based company called ‘Startapp’ - it grew by a
staggering 21,984% per annum for the period33
. When you read those
growth statistics doubling or tripling growth over a three year period
doesn’t really seem that scary after all.
Accelerating Growth and Prosperity
The fastest growing companies are variously estimated to account for
between 1% and 5% of all companies. Yet research suggests they can
account for up to 75% of all newly created jobs34
. That makes them
vital to economic prosperity35
.
Because fast-growing young firms account for a
disproportionate share of net job creation, policymakers who
are worriedly poring over unemployment projections might
instead seek to foster the creation of more high-growth firms.
Robert E. Litan36
A F1™ racing car and its driver have a single purpose - that is to
accelerate with maximum possible speed around any given
racetrack. Indeed it all boils down to this - either you are faster than the
competition or you are not. Drivers in F1™ are ultimately measured on
one thing and one thing only - that is speed. That is how their cars and
the teams who support them are measured too. Does the same apply
for managers in your organization?
Sample

The Starting Grid
Managers put their cars on the grid. It is a simple yet powerful exercise
aimed at quickly revealing how people feel about the performance of
their business unit, as well as its potential.
ACCELERATING AT THE CORE, OR EDGES?
Just what will you accelerate and by how much? That is a key strategic
question for any business leader. A central issue is what parts of the
business are capable of delivering the fastest growth.
Q: Where will your organization’s growth come from?
There is a debate among strategist and academics as to where managers
should look for accelerated growth. For some companies their core
business may not be capable of generating accelerated growth. They
may involve mature products and markets where the strategy is one of
harvesting revenue from existing customers and channels. Even if the
growth potential was there the structured and hierarchal way of
Sample

Need for Speed 41
managing these mature businesses would likely put the brakes on
growth. The speed of many parts of the organization may be bound by
slow moving corporate strategies and structures. However that does
not mean that the organization cannot accelerate ‘around the edges’.
Q: What specific business units, projects or strategies will you
accelerate?
…the odds of success can be influenced through a more
systematic approach to making growth investments, as a
portfolio of bets, and to the decoding of lessons from past
experiences in terms of what worked.
Chris Zook37
It is often argued that you cannot accelerate big corporations and that
the real opportunities for acceleration are to be found in the creation of
new secondary vehicles for accelerated growth at the edges of the
organization38
. However, that does not mean that those fast racers
should be unrelated to the core, or have the potential to enhance the
core if successful39
. Once these prove to be successful they can then be
progressively integrated more closely to the core of the organization (if
that is appropriate). This is an approach that is particularly suited to
areas of accelerated change and high levels of uncertainty – areas
where greater agility and innovation is required. Specifically, new
products, new markets/segments, new channels, new business
models. In this way an organization seeks to develop a balanced
portfolio of potential growth opportunities – balanced in terms of ‘sure
things’, high risk ‘toe in the water’ experiments in innovation, market
tests to identify longer term potential, quick wins with fast returns and
longer term or more speculative investments. The ability to run these
experimental fast laps is an important organizational capability. It is the
essence of organizational agility.
Sample

Luckily, leaders have a viable alternative to prediction: running
a portfolio of strategic experiments managed with an eye on the
twin imperatives of speed and economy.
Martin Reeves, Knut Haanaes & Janmejaya Sinha40
Accelerating Winners
F1™ is used as a metaphor for accelerating innovation, for recapturing
agility and for a highly adaptive approach to strategy which is
particularly suited to discontinuous change, such as the development of
new products, entering new markets, or coping with accelerated
change. It is about the ability to take growth related opportunities,
projects and priorities and to get them on the track41
. Then to
accelerate some, to pull others off the circuit depending on whether
they can prove themselves by means of fast laps. All the time learning
what will work and what won’t and progressively getting better at
identifying and backing winners.
The innovator’s dilemma - how executives can simultaneously
do what is right for the near-term health of their established
businesses, while focusing adequate resources on the disruptive
technologies that ultimately could lead to their downfall.
Clayton Christensen42
ACCELERATING OPPORTUNITIES
Nowhere is the need for speed greater than in respect of new products
and markets. Indeed, the race car is a metaphor for the type of
approach that is required to identify the winners of tomorrow43
. It
recognises that great business plans and detailed market analysis alone
cannot predict success or failure with anything near the same level of
confidence or accuracy as exposure to the market place. Fast-changing
markets require giving particular opportunities a race for their money,
Sample

Need for Speed 43
giving them a few laps around the track to see if they can
succeed. Some will and some won’t, those that do go on to race
again. Those that don’t make it are quickly pulled aside and, once the
lessons are learned, are quickly stripped of any further resources. The
objective is to find out fast - before too much money, time or other
resources have been expended. The many growth opportunities
available to the organization must compete against each other to win
the backing of senior management and the commitment of the
company. But an important point to note is that there is no stigma to
bowing out early. That is important because if an opportunity cannot
win the internal race for investment backing or the company’s limited
resources, then it has little chance of winning in the marketplace. But
from the side-lines if can be difficult to determine what the winners will
be - it can be a high risk gamble!
Accelerating growth requires identifying and accelerating those new
products, segments, strategies or projects capable of racing ahead of
the rest of the organization so as to accelerate innovation and well as
revenue. It is an approach that requires that the organization accelerate
learning and innovation and focus its scarce resources on those
opportunities most capable of winning. This is the essence of a dynamic
approach to growth strategy favoured by many business writers:
‘Today’s core business is highly unlikely to be an engine of
growth for tomorrow’.
Rita Gunther McGrath & Ian C. Macmillan44
How many of our people view this organization not as a set of
business units but as a portfolio of core competencies and
strategic assets that could be leveraged in new ways, new
combinations, or new settings to generate future growth?
Rowan Gibson45
Sample

…relying on the Boston Consulting Group’s famous cash cow,
which remained the watchword for decades and basically
suggests companies squeeze profits from successfully
established business, is no longer a guarantee for survival.
Oliver Gassmann, Karolin Frankenberger & Michaela Csik46
…leaders of successful and enduring companies make
substantial investments not just in near-term performance-
related initiatives, but in things that have no clear immediate
benefit, nor any cast-iron guarantee that they will pay off at a
later date.
Scott Keller & Colin Price47
Unrelenting exploitation of small opportunities provide firms
with the wherewithal to seize golden opportunities when they
arise.
Donald Sull48
A successful enterprise usually focuses on becoming
increasingly efficient at replicating the same basic things, rather
than on becoming equally efficient at doing different things.
This was a big factor in the demise of once-great companies like
Kodak, Blockbuster, and Nokia.
Rowan Gibson49
Sample

Need for Speed 45
SUMMARY: NEED FOR SPEED
Do you feel the need for speed in your organization? If you are like most
managers the answer is ‘YES’. That means you want your organization
to go (and indeed grow) faster. Accelerating growth isn’t easy however,
especially if that growth is to be sustained and profitable over time.
How fast you can go depends on what type of revenue generating/value
creating machine you are driving and the shape that it is in. It also
depends on where you are on the starting grid. That is not to say that
the driver does not matter, but whether your vehicle is a Porsche or a
bus sets the real parameters for speed and performance.
Your organization may have several vehicles for growth – the equivalent
of a number of cars in different races. This is an application of the
portfolio approach to strategy. The question is: What vehicles are
capable of accelerating sustained and profitable growth? That is
capable of F1™ levels of acceleration.
When it comes to the racetrack that is your industry or marketplace
there are vehicles of every class. Although many are capable of reaching
high speeds and doing a number of fast laps, most don’t have the speed
and agility to win consistently over the longer term. Indeed, only about
one in ten organizations are capable of Formula One™ levels of
performance. That requires triple acceleration; growing the top line,
bottom line and ROA by at least 5.5% over a decade. But achieving this
also requires accelerating value creation, innovation, skills and a lot
more besides.
Where will growth come from – will it be derived from the core, or from
the edges of your organization? The ability to devise ‘a balanced
portfolio’ of strategic growth experiments is key. That requires fast laps.
Sample

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